Bank of America Signals Shareholder Returns Are Coming
Mike Maher submits:
Investors looking for income in the coming years may want to look at Bank of America ( BAC ) shares, given CEO Brian Moynihan’s comments at the company’s investor conference yesterday.
While Moynihan admits BAC is not yet running on all cylinders, he insists the company is moving in the right direction. Divisions such as Wealth Management could begin to reach normalized earnings by the second half of 2011, while the bank’s Deposits and Home Loans businesses may take until 2013 or 2014 to reach normalized earnings.
Once BAC has completely worked through all its issues, Moynihan says that Bank of America’s normalized earnings should be between $35-40 billion on a pretax basis — an astonishingly large number given the $150 billion market cap the market is assigning BAC. With no plans for balance sheet growth, M&A, or earnings retention, that leaves a lot of excess cash that Moynihan says is destined Complete Story »
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